Four definitions of economics

Economics

Four definitions, each referring to particular stage of the growth of the subject of Economics, are presented here. They are:
01. Smith’s Wealth Definition,representing the Classical era;
02. Marshall’s Welfare Definition,representing the Neo-Classical era;
03. Robbins’ Scarcity Definition,representing the New Age; and,
04. Samuelson’s Growth Definition, representing the Modern Age.

Wealth Definition:
Adam Smith
Adam Smith (1723-1790), in his book “An
Inquiry into Nature andCauses of Wealth of
Nations” (1776) defines“Economics as the
science of wealth”. He explains how a nation’s wealth is created and increased. He considers that the individual in the society wants to promote his own gain and in this process, he is guided and led by an “invisible hand”. He
states that every man is motivated by his
self interest This means that each person works for his own good.

Smith favours the introduction of “division of labour” to increase the quantum of output. Severe competition in factories and society helps in bettering the product. Supply force is very active and a commodity is made
available to the consumers at the lowest
price.

Welfare Definition:
Alfred Marshall
Alfred Marshall (1842-1924) in his book “Principles of Economics” (1890) defines Economics thus:“Political Economy” or
Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being. Thus, it is on one side a study of wealth; and on the other, and more important side, a part of the study of man.”
The important features of Marshall’s definition are:
a. Economics does not treat wealth as the be-all and end-all of economic activities. Man promotes primarily welfare and not wealth.
b. The science of Economics contains the concerns of ordinary people who are moved by love and not merely guided or directed by the desire to get maximum monetary benefit.
c. Economics is a social science. It studies
people in the society who influence
one another.

Scarcity Definition:
Lionel Robbins
Lionel Robbins published a book “An Essay on the Nature and Significance of Economic Science” in 1932. According to
him, “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative
uses”.
The major features of Robbins’ definition are:
a. Ends refer to human wants. Human
beings have unlimited number of wants.
b. On the other hand, resources or means
that go to satisfy the unlimited human wants are limited or scarce in supply. The scarcity of a commodity is to be considered only in relation to its demand.
c. Further, the scarce means are capable
of having alternative uses. Hence, an
individual grades his wants and satisfies
first his most urgent want. Thus,Economics, according to Robbins, is a science of choice.

Growth Definition:
Samuelson
Paul Samuelson defines Economics as “the study of how men and society choose,with or without the use of money, to employ scarce productive resources which could have alternative uses,to produce various commodities over time, and distribute them for consumption, now and in the future among various people and groups of society”.
The major implications of this definition are as follows:
a. Like Robbins, Samuelson states that the means are scarce in relation to unlimited ends and that such means could be put to alternative uses.
b. Samuelson makes his definition dynamic by including the element of time in it. Therefore, his definition covers the theory of economic
growth.
c. Samuelson’s definition is applicable also in a barter economy, where money is not used.
d. His definition covers various aspects like production, distribution and consumption.
e. Samuelson treats Economics as a social science, whereas Robbins regards it as a science of individual behaviour.Of all the definitions discussed above, the ‘growth’ definition stated by Samuelson appears to be the most satisfactory.

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